Question
I need my answer from question 3 to be confirmed and question 4 to be answered. I am only providing question 3 as it is
I need my answer from question 3 to be confirmed and question 4 to be answered. I am only providing question 3 as it is necessary context.
The table below shows the average sales (as number sold per day) at grocery store of Product A based on its prices and the prices of a competitors Product B, where the two competing products and their respective prices are displayed next to each other, S=S(A,B).
A = $2.75 | A = $3.00 | A = $3.25 | A = $3.50 | A = $3.75 | |
B = $2.90 | 107 | 93 | 73 | 48 | 15 |
B = $3.15 | 156 | 142 | 122 | 97 | 64 |
B = $3.40 | 205 | 191 | 171 | 146 | 113 |
B = $3.65 | 254 | 240 | 220 | 195 | 162 |
B = $3.90 | 303 | 289 | 269 | 244 | 211 |
Problem 3 question
- In order to estimate the average sales of Product A when the price of Product A is $2.75 and the price of Product B is $3.90, which variable should be held constant? Why?
Problem 3 answer
- To estimate the average of sales we need to treat the price of A as a constant and observe that production is affected by which other variables. Here production is also affected by price of B so price of A should be held constant.
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Problem 4 question (the question I need to be answered)
- Will the cross-section needed to estimate the average sales in problem 3) be represented by a row or column? Why?
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